Q:
My federal marginal rate is 25%. My effective federal rate is 13.71% of adjusted gross income (according to TurboTax). The difference affects long term planning results dramatically.
My effective state tax rate is 3.82% of my adjusted gross income for California.
What is the best way to enter both of these rates in Other Assumptions section? Should I just add 13.71% and 3.82%......then put in 17.53% directly in the Total Effective Rate box, even though this may not be exactly correct?
A:
The correct answer is… put in 17.53% directly in the Total Effective Rate box!
That is the closest way to do it. If you do that don’t touch state or federal
or it will retrigger the mini effective rate calculation.